Working or retired, who doesn’t dream of traveling more? When I early retired, we aspired to travel several months out of the year. So we bought a small RV. RVs are flexible and comfortable. You travel on your own schedule, overnighting any place that interests you. You sleep in your own bed and eat your own food. It’s like being at home while being on vacation. I assumed that owning a small RV would save us money. And it does. But if you’re thinking about renting an RV this summer? Well, you might want to reconsider. Here’s why. Let’s crunch the number on three modes of road-trip travel: (1) driving your own car and staying in hotels; (2) owning a small RV; or (3) renting a small RV. (I focus on small RVs here—those less than about 25 feet in length—because they are most cost effective. These modern small RVs are economical and comfortable for a couple or small family.) For each option, we’ll compute the cost per mile of owning the vehicle. To this, we’ll add the cost of driving the vehicle, based on its fuel consumption and the current national average cost of gasoline, about $2.70 per gallon as this is written. That will give us an overall cost per mile of operating the vehicle. Next, we’ll figure the daily expense for traveling, based on average hotel and camping rates. For food costs, we’ll compare the expense of dining out for hotel travel with preparing meals in an RV. I’ll use national averages when possible, plus my own experience and estimates. What we’ll discover is that the essential trade-off of RV ownership is that it saves you on daily costs at the expense of mileage costs. An RV is more expensive to own and drive, but saves you each day on lodging and meals. Your personal breakeven point will depend on your lifestyle and travel plans. Let’s dig into the numbers. Staying in Hotels On a traditional driving vacation you use your own car, stay in hotels, and dine out. Assume a used vehicle purchased for $20,000 with 20,000 miles, an expected lifetime of 150,000 miles, a salvage value of $2,000, and annual maintenance costs of $900 over 15 years. That comes to a capital cost of $0.24/mile. Assuming 30 mpg gives fuel costs of $0.09/mile, for a total operating cost of $0.33/mile. Using the national average hotel room rate of $121 per night and assuming that dining out costs $60 per day, we arrive at a daily cost of $181 for a traditional vacation. (These costs could be far higher in choice vacation spots.) Owning Your Own Small RV Next let’s look at the cost of owning a small RV. Assume a used rig purchased for $80,000 with 20,000 miles, an expected lifetime of 150,000 miles, a salvage value of $4,000, and annual maintenance costs of $1,700 over 15 years. That comes to a capital cost of $0.78/mile. Assuming 15 mpg gives fuel costs of $0.18/mile, for a total operating cost of $0.96/mile. Using an average campground rate of $25 per night and groceries of $30 per day for preparing meals in your RV, we arrive at a daily cost of $55 for vacationing in your own RV. Renting a Small RV Finally, let’s consider renting a small RV. There is no ownership cost. The total operating cost is $0.18/mile based on fuel consumption. (This assumes you stay under the typical 100 miles per day average allowance for a rental RV, otherwise there would be an additional mileage charge.) Based on my survey of RV rental prices at three regional dealers and one national chain, the average rental rate for a small RV is about $205 a day. Adding to that a campground rate of $25 per night, plus meal costs of $30 per day, we arrive at a daily cost of $260 for vacationing in a small rental RV. Bottom Line Now that we have per-mile operating costs plus daily living costs for each mode of travel, we can calculate the total cost for two representative vacations: a 500-mile trip over 7 days, and a 2,000-mile trip over 21 days. Owning a small RV is the clear winner for both trips, with costs of $865 and $3,077, respectively. The traditional vacation is next at $1,433 and $4,466. And the rented RV is most expensive, at $1,910 and $5,820. Owning a small RV lets you travel for only 60%-70% of the traditional car-plus-hotel cost. That means half again as much vacation time, if you’re living on a fixed income in retirement! The exact savings will depend on the nature of your travel. Low-mileage, long-duration trips are the most cost effective in an RV. The breakeven point is about 200 miles a day. If you drive less than that on average, an RV beats the traditional car/hotel vacation. So owning a small RV is the cheapest mode of extended travel. But try before you buy. This is when a RV rental can make sense. Once you’re certain RV living is for you, shop used RVs. We bought our 3-year old rig for about half price, and it has held its value well. Finally, never take on debt to finance vacation or travel costs. The last thing you need on returning home is more bills to pay! Darrow Kirkpatrick is a software engineer and author who lived frugally, invested successfully, and retired in 2011 at age 50. He writes regularly about saving, investing and retiring on his blog CanIRetireYet.com.